The euro was trading higher after the release, up 0.6% against the dollar at $1.093. Yields on 10-year German government bonds rose to 0.345%.

The euro had dropped Thursday on European Central Bank President Mario Draghi's insistence that the era of easy monetary policy isn't over in Europe.

"There is clearly a risk that we could stand at the June meeting with an ECB that changes its forward guidance in a more hawkish direction provided the cyclical situation looks good," said Pernille Bomholdt Henneberg, chief analyst at Danske Bank.

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Despite the cooling in equity markets toward the end of the week, European equity funds recorded their strongest inflows in more than a year, according to EPFR Global data.

In the week to April 26, $2.4 billion entered European equity funds, which included the jump in equity prices -- particularly in the banking sector -- that came after the first round of the French presidential election. Those net flows are the strongest into European equities since December 2015.

"Europe is overweight financials, commodities and industrials relative to the U.S.," said David Stubbs, global market strategist at J.P. Morgan Asset Management.

"With stronger growth at home, a cyclical upswing globally, the euro competitive and trade recovering you should see an uptick -- this should be the year that earnings growth arrives," he added.

Bank of America Merrill Lynch analysts see continued gains for European equities in the next year, expecting the Stoxx Europe 600 index to rise to 420 from 387 currently, a gain of around 8.5%, on improved earnings.

Elsewhere in foreign exchange markets, the dollar was down across the board, falling 0.2%, according to the WSJ dollar index, which measures the greenback against a basket of international currencies.

The British pound also rose against the dollar, up 0.3% to $1.294, touching its highest levels since early October, despite British economic data showing a growth slowdown in the first quarter of the year.

Traders were awaiting the first reading of the U.S. gross domestic product for January through March. Economists surveyed by The Wall Street Journal estimate GDP grew at a 1% annual rate in the quarter, roughly half the economy's average performance in recent years.

South Korea's Kospi closed 0.2% lower after President Donald Trump said he wanted to renegotiate a trade deal with the country, in an interview with Reuters.

Mr. Trump also said a major conflict over North Korea's nuclear ambition is possible.

"The fact there's potential for a showdown with North Korea, that's always going to worry investors in Japan," said Andrew Sullivan, managing director of sales trading at Haitong International Securities. "You [might] get the North Koreans put into a corner and they feel they just have to do something...One risks pushing them too far."

Kosaku Narioka and Hiroyuki Kachi and

Yifan Xie

contributed to this article.

Write to Mike Bird at Mike.Bird@wsj.com and Ese Erheriene at ese.erheriene@wsj.com